CEO of troubled Iowa brokerage in court, charged

FILE - This Monday, April 4, 2011 file photo shows Russ Wasendorf, Sr., CEO of Peregrine Financial Group, Inc. in Cedar Rapids, Iowa. A complaint filed Friday, July 13, 2012 in U.S. District Court in Cedar Rapids says Wasendorf, Sr., 64, made false statements to the U.S. Commodity Futures Trading Commission about the value of customer funds held by his company, Peregrine Financial Group, Inc. A press release from the U.S. Attorney's Office says Wasendorf was arrested Friday by FBI agents and is due in federal court in Cedar Rapids for an initial appearance. (AP Photo/Waterloo Courier, Rick Chase, File)
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FILE - This Monday, April 4, 2011 file photo shows Russ Wasendorf, Sr., CEO of Peregrine Financial Group, Inc. in Cedar Rapids, Iowa. A complaint filed Friday, July 13, 2012 in U.S. District Court in Cedar Rapids says Wasendorf, Sr., 64, made false statements to the U.S. Commodity Futures Trading Commission about the value of customer funds held by his company, Peregrine Financial Group, Inc. A press release from the U.S. Attorney's Office says Wasendorf was arrested Friday by FBI agents and is due in federal court in Cedar Rapids for an initial appearance. (AP Photo/Waterloo Courier, Rick Chase, File)
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FILE - In this Tuesday, Sept. 8, 2009 file photo, Russ Wasendorf, chairman and chief executive officer of PFGBest poses at the new building nearing completion in Cedar Falls, Iowa. A complaint filed Friday, July 13, 2012 in U.S. District Court in Cedar Rapids says Wasendorf, Sr., 64, made false statements to the U.S. Commodity Futures Trading Commission about the value of customer funds held by his company, Peregrine Financial Group, Inc. A press release from the U.S. Attorney's Office says Wasendorf was arrested Friday by FBI agents and is due in federal court in Cedar Rapids for an initial appearance. (AP Photo/Waterloo Courier, Brandon Pollock)— AP

FILE - In this Tuesday, Sept. 8, 2009 file photo, Russ Wasendorf, chairman and chief executive officer of PFGBest poses at the new building nearing completion in Cedar Falls, Iowa. A complaint filed Friday, July 13, 2012 in U.S. District Court in Cedar Rapids says Wasendorf, Sr., 64, made false statements to the U.S. Commodity Futures Trading Commission about the value of customer funds held by his company, Peregrine Financial Group, Inc. A press release from the U.S. Attorney's Office says Wasendorf was arrested Friday by FBI agents and is due in federal court in Cedar Rapids for an initial appearance. (AP Photo/Waterloo Courier, Brandon Pollock)
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CEDAR RAPIDS, Iowa 
A federal prosecutor says the chief executive of an Iowa-based brokerage firm carried out a $200 million fraud scheme that could land him in prison for years.

Assistant U.S. Attorney Peter Deegan said Friday that Peregrine Financial Group Inc. CEO Russell Wasendorf Sr. could face "a wide range of criminal charges" for the scheme in which he allegedly falsified bank records to embezzle customer funds for 20 years.

Deegan made the comment during Wasendorf's initial federal court appearance in Cedar Rapids on charges that he made false statements to financial regulators. Another hearing is scheduled for Wednesday.

Wasendorf appeared healthy during the hearing. He'd been hospitalized after attempting suicide outside the company's headquarters on Monday.

Investigators say he admitted in a suicide note to carrying out an elaborate embezzlement scheme.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

The chief executive officer of an Iowa-based brokerage firm admitted in a suicide note that he carried out an elaborate fraud scheme in which he embezzled more than $100 million from customers over nearly two decades, federal investigators said Friday.

FBI agents arrested Russell Wasendorf, Sr., 64, of Cedar Falls on Friday. Federal prosecutors unsealed a criminal complaint charging the CEO of Peregrine Financial Group, Inc., with making false statements to regulators and released documents detailing a wide-ranging fraud scheme that apparently fooled colleagues, customers and regulators for years.

Wasendorf had been hospitalized at University of Iowa Hospitals and Clinics after attempting suicide outside the company's headquarters in Cedar Falls on Monday by hooking up a tube to his car's tailpipe.

His company filed for bankruptcy Tuesday, the same day the industry's top regulator filed civil fraud charges alleging the firm misused customer money and falsely claimed a bank account contained more than $220 million when it actually had about $5 million. The money in that account belonged to customers, and was supposed to be kept separate from Peregrine's own money.

Officials from another industry regulator, the Financial Industry Regulatory Authority, were on site at Peregrine's Cedar Falls offices to examine the firm Friday. The agency regulates broker-dealers that buy and sell stocks. The losses apparently are centered in the part of Peregrine that sold commodity options and futures.

An affidavit by FBI agent William Langdon, made public with the criminal complaint, says authorities found Wasendorf unresponsive Monday in his vehicle, along with a suicide note addressed to his wife and a signed statement in which he detailed his fraud.

"Through a scheme of using false bank statements I have been able to embezzle millions of dollars from customer accounts at Peregrine Financial Group, Inc. The forgeries started nearly twenty years ago and have gone undetected until now. I was able to conceal my crime of forgery by being the sole individual with access to the US Bank accounts held by PFG," he wrote in the note, according to court documents.

Wasendorf said that he faced "a difficult decision" when his access to capital was limited earlier in his career.